Who will win the dollar store bidding war?

Dollar General

Dollar stores continue the bidding war over the purchase of Family Dollar stores.

Two dollar store chains are competing to buy a third, Family Dollar.

The retailer entertained an $8.5 billion merger deal with Dollar Tree last month, and Dollar General announced Monday it would pay a competitive $9.7 billion for the chain. While all of these discount stores are similar, they have several important differences.  

Here's a look:

Dollar General

  • Size: Biggest of the three.
  • Products: lot of brand names, a mix of food and discretionary items like clothing and beauty products.
  • Placement in the Fortune 500: 164.
  • Locations: More than 11,500 locations in more than 40 states. Primarily in smaller towns, located in the southern and eastern U.S., as well as the Midwest and the Southwest.
  • Prices: About a fourth of their items are $1 or less.
  • How are they doing? Chain is thriving with $17.5 billion in revenue and $5.4 billion in profits.

Dollar Tree

  • Size: Smallest of the three.
  • Products: Mostly imported from China, focused on discretionary items like party supplies, beauty products, etc.
  • Placement in the Fortune 500: 342.
  • Locations: More than 5,000 locations in 48 states, mostly located in strip malls in small towns.
  • Prices: Most items cost $1 or less.
  • How are they doing? The chain is thriving and growing with $7.8 billion in revenue and $2.7 billion in profits.

The target of the bids: Family Dollar

  • Size: The takeover target, and second-largest of the three.
  • Products: A lot of brand names; focuses on food, also carries some linens and other products.
  • Placement in the Fortune 500: 271.
  • Locations: More than 8,200 stores in 45 states, mainly in urban and rural areas.
  • Prices: Most items are under $10.
  • How are they doing? Family Dollar has been struggling and closing stores. It tried raising prices and the plan back-fired. It has recently been closing stores. They have about $10.3 billion in revenue and $3.5 billion in profits.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...